The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.

The Outreach & Education function engages, empowers and educates the public in the Second District. Our outreach mission furthers the Bank’s commitment to the region by listening to the communities we serve and developing programs, analysis and sponsored conferences and clinics to help meet their needs. Our education mission aims to advance public knowledge about the Federal Reserve System and its role in the economy.

The Federal Reserve has adopted a policy statement supporting
prudent commercial real estate (CRE) loan workouts. This policy statement,
adopted by each of the financial regulators provides guidance for examiners,
and for financial institutions that are working with CRE borrowers who are
experiencing diminished operating cash flows, depreciated collateral values,
or prolonged delays in selling or renting commercial properties.

The financial regulators recognize
that prudent loan workouts are often in the best interest of both financial
institutions and borrowers, particularly during difficult economic conditions.
This policy statement details risk-management practices for loan workouts that
support prudent and pragmatic credit and business decisionmaking within the
framework of financial accuracy, transparency, and timely loss recognition.

Financial
institutions that implement prudent loan workout arrangements after performing
comprehensive reviews of borrowers' financial conditions will not be subject
to criticism for engaging in these efforts, even if the restructured loans
have weaknesses that result in adverse credit classifications. In addition,
performing loans, including those renewed or restructured on reasonable modified
terms, made to creditworthy borrowers, will not be subject to adverse classification
solely because the value of the underlying collateral declined.